Introduction
“Corporations have changed”
“Corporations,” remarks a recent study by Saura Masconale and Simone Sepe, “have changed.”Footnote 1 Previously allergic to political controversy, corporations are newly determined “to change the world, one pressing issue at a time.” To this end, they rush headlong into “corporate activism,” defined as “a firm’s public demonstration of support for or opposition to one side of a partisan socio-political issue.”Footnote 2
Consider a few examples:
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• “This land was built on the backs and genius of Black people,” proclaims an advertisement for Sprite.
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• In a famous spot, Gillette channels #MeToo, decrying “toxic masculinity” and admonishing men to do better.
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• During Pride Month, Target releases special LGBTQIA+ merchandise, including kids’ clothes and “tuck-friendly” women’s bathing suits.
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• Major League Baseball boycotts Georgia over a controversial election law.
In these and many other instances, corporations have proven surprisingly eager to lob grenades in America’s raging culture war.
What should we make of this important new trend in corporate behavior? Setting aside the economics of corporate activism,Footnote 3 I will focus instead on its ethics. Building on important work by Masconale and SepeFootnote 4; Lechterman, Jenkins, and StrawserFootnote 5; and Saunders-Hastings,Footnote 6 I will raise two normative complaints against corporate activism. First, it is undemocratic. Second, it adds to the undesirable overpoliticization of everyday life—what Robert Talisse calls the “political saturation of social space.”Footnote 7
“Serving a social purpose”
Question: What’s the purpose of a business? Standard answer: Businesses exist to make money for their owners/shareholders.Footnote 8
Proponents of “stakeholder capitalism” would give that answer only partial credit. On their view, companies must do more than merely turn a profit. They should also “serve a social purpose [by benefiting] all of their stakeholders, including shareholders, employees, and the communities in which they operate.”Footnote 9
What kinds of social benefits do stakeholder capitalists have in mind? Recent scholarship distinguishes two models of corporate beneficence. “Corporate Social Responsibility” asks businesses to further the common good by producing “universally recognized benefits for all stakeholders.”Footnote 10 These are things like food drives and cancer awareness campaigns—apolitical, uncontroversial goods or services whose value even partisan foes can acknowledge. Companies can provide such goods without thereby taking sides in the culture war.
But perhaps they should take sides in the culture war? That is the core idea behind a second model of corporate morality, “corporate activism,” which urges companies to pursue even politically divisive social improvements. Funding the food bank and treating your workers and suppliers well: that is corporate social responsibility. Doing these things while also attempting to save the planet, defend democracy, and foment social justice? That is corporate activism.Footnote 11
In the words of Andrew Winston, the activist corporation should “just do what’s right,” no matter how divisive the issue.Footnote 12 Alternatively, as Rebecca Henderson puts the point, corporate executives “know what needs to be done to build a just and sustainable world… . Business must step up.”Footnote 13
Curiously, corporate activism on these divisive issues manages to be astonishingly one-sided. No matter the topic—election law, abortion rights, racial justice, LGBTQ issues, climate policy—corporate America “invariably throws its considerable weight behind cultural progressives,” as Darel Paul notes.Footnote 14 We live in an era not merely of corporate activism, but ideologically monolithic corporate activism: what Ross Douthat calls “woke capitalism,” a historically unprecedented politico-economic alliance between global mega-corporations, on the one hand, and progressive elites, on the other.Footnote 15
Have gender studies professors and C-suite executives ever been more copacetic? We are witnessing, surely, peak ideological alignment between Wall Street and Harvard Yard.
Paths taken, and not
In this essay I focus on corporate activism, leaving consideration of its less divisive cousin, corporate social responsibility, for another time. One way to evaluate corporate activism would be to do so on a case-by-case basis, approving of substantively correct activism while disapproving of substantively incorrect activism. Companies should not be progressive activists (or conservative activists), on this view, because they should not be progressive (or conservative), not because they should not be activists. This objection targets (purportedly) incorrect corporate activism rather than activism as such. The master principle guiding this approach is something like: “Let corporations enter the political and cultural fray, provided they fight on the side of the angels.” (Recall Winston’s exhortation to “just do the right thing.”)
I mention this approach to distinguish it from my own. I find fault with all corporate activism, no matter its ideological valence or substantive merits. Put differently, although I do think progressive corporate activism undermines democracy and overpoliticizes everything, this is not, at bottom, because Nike, Bank of America, Procter & Gamble, and so on are woke, but because they are activist and because they are all reading from the same basic ideological script. My objection, at root, is not to woke capitalism per se, but to ideologically unanimous, politically activist capitalism.
Here is my plan. In the next section I argue that activist corporations have, in effect, a “megaphone” for amplifying their sociopolitical positions and a “veto button” for opposing disliked policy changes.Footnote 16 Combined, these tools give them political-equality-violating levels of influence. Corporate activism is therefore bad for democracy.
The section after that considers and rebuts an objection. The objection asks: Insofar as activist corporations are merely giving consumers what they want, aren’t they mirroring rather than distorting public opinion? And isn’t that actually good for democracy? My rebuttal is that activist companies do not mirror public opinion; they mirror part of it, the progressive part. Far from faithfully representing public opinion, then, activist corporations tend to distort it.
Some readers may question whether corporate activism could possibly be as one-sided, politically, as I suggest. After all, conservatives buy sneakers, too, as Michael Jordan famously quipped. Indeed they do, and yet activism tilts left nevertheless—for reasons I explain in the following section, drawing on work by Darel Paul, Patrick Deneen, and other theorists of “woke capitalism.”
The concluding section clarifies my account’s practical implications while also pressing a fresh objection against corporate activism, namely, that it contributes to the pernicious overpoliticization of everyday life, leaving us angrier, more alienated, and less solidaristic than we would otherwise be. My overall conclusion is that corporations should generally avoid sociopolitical activism, on pain of inflaming negative partisanship, undermining political equality, and distorting political deliberation.
Corporate activism is undemocratic
The key democratic insight: Process matters
Suppose Smith has the correct views on everything. Why not anoint him King and turn his word into law? Set aside concerns about absolute power corrupting absolutely. Set aside the worry that more heads are epistemically better than one. Just stipulate that Smith is incorruptible, omniscient, and will churn out nothing but the best possible policies. Should we make him monarch?
No, because in politics it matters not just what happens, but how—or so goes a key democratic insight. From the democratic perspective, we care not merely about political outputs, but also about political processes. We want to get good results, sure, but only in the right way.
And what is the right way? As an influential strand of democratic theory has it, “citizens should be able to participate as equals in deciding how society will address important issues of common concern.”Footnote 17 King Smith violates this democratic requirement. Even assuming his policies are flawless, his process is not; it fails to treat us as civic equals, as democratic citizens entitled to an equal voice in all things political. Under Smith’s rule, we do not decide common issues together; instead, he does. That is plainly undemocratic. As is corporate activism, and for the same basic reason: corporate activism usurps our democratic authority, giving a subset of political actors too much influence over issues properly reserved for all.
The argument formalized
My argument is in three stages. Stage I explains why the issues addressed by corporate activism should be decided democratically. Stage II argues that democratic decisions are subject to an egalitarian requirement. Stage III establishes that corporate activism violates this egalitarian requirement.
Stage I
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1. If an issue involves important matters of common concern, then it belongs on the democratic agenda.
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2. The issues addressed by corporate activism involve important matters of common concern.
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3. Therefore, the issues addressed by corporate activism belong on the democratic agenda. [From 1 and 2]
Stage II
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4. If an issue belongs on the democratic agenda, then it should, on pain of violating democratic norms, be decided via an egalitarian process: that is, one that gives each person an equal say.
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5. Therefore, the issues addressed by corporate activism should, on pain of violating democratic norms, be decided via an egalitarian process: that is, one that gives each person an equal say. [From 3 and 4]
Stage III
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6. When a corporation engages in corporate activism with respect to an issue, the decision-making process concerning that issue is not egalitarian.
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7. Therefore, when a corporation engages in corporate activism with respect to an issue, it violates democratic norms. [From 5 and 6]
Commentary on stage I
Which issues should be decided democratically? This is the question of democracy’s “scope.” Premise 1 asserts what I take to be a widely held answer. If an issue involves important matters of common concern, then it should be decided democratically.Footnote 18 (And what does it mean to decide something democratically? Premise 4 answers this question. Democratic decision-making is egalitarian; it gives members an “equal say.” More on this in the following subsection.)
One might object to premise 1 by defending a narrower view of democracy’s scope. According to what I will call the “minimalist” view, elections should be decided democratically, but that is it. Provided everyone had an equal electoral say over who holds political office, everything that must be decided democratically has been decided democratically.
We should reject the minimalist view. It draws democracy’s scope too narrowly. To see this, imagine that we elect Smith via a democratic process. We each had an equal electoral say and Smith won. So far, so good. But then Smith goes to Washington and listens only to a small group of billionaires, legislating precisely as they wish. These billionaires now have outsized influence over policy. This, surely, is undemocratic; yet the minimalist view detects nothing amiss here, because, after all, we had an equal say in sending Smith to Washington.
A better view of democracy’s scope would hold that democracy requires not just that we have a democratic say in sending Smith to Washington, but also that we have a democratic say in determining what he does once he is there. Premise 1 captures this point. Premise 1 says that citizens should have a democratic say over all important decisions facing their country—not just electoral decisions, but also decisions about taxes, social services, foreign policy, infrastructure, education, and countless other important matters of common concern.Footnote 19
Premise 2 links this discussion of democracy’s scope to our main topic: corporate activism. We know from Premise 1 that issues affecting important matters of common concern belong on the democratic agenda. Premise 2 asserts that the issues touched by corporate activism meet this description. They are issues affecting important matters of common concern. Thus, they belong on the democratic agenda; they should be decided democratically, just as claim 3 says.
Given the way I am defining corporate activism, I see no way to reject premise 2. Remember, corporate activism refers to companies taking a public stand on contested social and political issues, such as racial justice, reproductive rights, gun control, environmental policy, and so on. Such issues are the very stuff of contemporary politics. They overlap with—or simply are—centrally important matters of common concern. They are things to be decided democratically if anything is.
Commentary on stage II
Stage I tells us that corporate activism addresses issues falling within democracy’s scope. Stage II specifies how such issues are to be decided. Items on the democratic agenda must, on pain of violating democratic norms, be decided via an “egalitarian process,” that is, one that gives each person an equal say.
So it is, then, with respect to the many and sundry hot-button issues championed by this or that corporate behemoth. When Ben & Jerry’s ice cream company commands us to “dismantle white supremacy,” it is weighing in on a political topic that, per democratic strictures, should be decided through an egalitarian process that is just as sensitive to your voice as it is to Ben’s or Jerry’s (let alone Ben & Jerry’s; indeed, it is not clear why corporations, as opposed to the individual citizens owning and working in them, should have any say at all in a democracy).
I should clarify premise 4’s notion of an “equal say.” This is shorthand for a more complex idea that we can call “equal opportunity for political influence.”Footnote 20 John Rawls interprets this as the requirement that a person’s chances of influencing policy and attaining political office should be unaffected by his or her socioeconomic standing.Footnote 21 (This is the political echo of his “fair equality of opportunity” principle, which requires that a person’s prospects for income and wealth should be uninfluenced by his or her socioeconomic class of origin.) The Elon Musks of the world should not have more say over policy than you just because they have deeper pockets.
What if they’re just more charismatic, persuasive, or politically motivated? Rawls’s idea allows “natural” advantages like this to affect political influence, even as it seeks to neutralize the impact of “social” or “economic” factors. So, charismatic Musk can, compatibly with democratic equality, have more impact than boring you; what the democratic ideal rules out is rich Musk having more influence than you simply on account of his economic power.
Henceforth, when I mention an “equal say,” remember that I really mean the more complex idea conveyed by “equal opportunity for political influence.” I take this idea to be extremely well-subscribed among democratic theorists. But some readers may reject it as too egalitarian.Footnote 22 No problem. My argument can operate with a weaker variant of premise 4, one that requires not an “equal” say, but merely a “not wholly outmatched” say. As Saunders-Hastings captures the idea: “It is undemocratic if outcomes of common concern—including both formal political decisions and the social outcomes over which those decisions ought to be authoritative—are overwhelmingly responsive to the preferences of the rich.”Footnote 23 Without requiring equal influence, this view cries democratic foul against “the outsized influence of the rich.”Footnote 24 While I will use the Rawlsian, egalitarian version of premise 4 in what follows, Saunders-Hastings’s less demanding variant could be swapped in without argumentative loss.
Commentary on stage III
Issues on the democratic agenda, such as those addressed by corporate activism, must be decided through a broadly egalitarian process—or so Stage II has it. Stage III explains the way in which corporate activism violates this egalitarian requirement.
Suppose a group is trying to decide something in an egalitarian way, say, where to go to dinner. Each member is to have an equal say. How might this process, considered as an egalitarian process, go wrong? How could it fail to be egalitarian?
There are two ways.Footnote 25 First, inputs could be disproportionate. Some members could have too much say. Maybe you get two votes to my one. Second, collectively chosen outputs could be subverted. Having decided together, in an egalitarian way, to go to Joe’s Pizza, you might be able to override this result. Maybe you own the car we need to get there. “On second thought,” you can say, jangling your keys, “let’s go somewhere else.”
Corporate activism undermines egalitarian decision-making in both of these ways. It renders inputs disproportionate. And sometimes it subverts outputs, too. Consider first the problem of disproportionate inputs.
“Corporate activism,” write the authors of an article on the ethics of corporate boycotts, “is an especially glaring way of converting economic power into political power.”Footnote 26 The root problem is that “corporate persons possess dramatically more resources for expressing their positions than natural persons do.”Footnote 27 This is not just about money. Companies have massive war chests, yes, but also prominent platforms from which to broadcast their sociopolitical messages as well as a built-in, captive audience—employees—required to listen.
Armed with these influence-boosting resources, companies can advance their preferred causes in a variety of ways. Among the more familiar are advertising and external messaging. Some examples include:
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• Subsequent to Derek Chauvin’s conviction for the murder of George Floyd, the official Starbucks Twitter account tweeted: “We still have work to do to address systemic racism and ensure everyone has an equal chance to succeed and thrive. Black lives matter, and we stand with our Black customers and partners.”Footnote 28
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• Delta’s chief executive officer (CEO) released a statement declaring a Georgia election law “unacceptable” and “out of step with Delta’s values.”Footnote 29
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• Nearly every company, it seems, uses social media for sociopolitical messaging, posting a rainbow-themed logo for Pride Month, a black square for Black Lives Matter (BLM), and a blue-and-yellow flag for Ukraine.
Companies can exert influence in other ways, too:
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• They can donate, as when corporate America collectively pledged $82 billion to racial justice initiatives in the wake of George Floyd’s death.Footnote 30
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• They can proselytize to employees, as with companywide emails opining about the latest political flashpoint or ideologically contentious, mandatory diversity, equity, and inclusion (DEI) training.
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• Some companies even host internal, politically themed events: consider Comcast’s “Pride World,” complete with “Pride floats, Pride flags, and a Pronoun Guide for employees.”Footnote 31
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• Finally, some companies try to change the world by changing their business practices, as when Netflix shifted 2 percent of its holdings—some $100 million—to Black-owned banks.Footnote 32
The bottom line? Given their massive resource base, captive employee audience, and gigantic platforms, companies can exert tremendous influence in support of their preferred causes. Ordinary people, meanwhile, can … tweet? Call their Congressperson? Donate $50 here, $100 there? Engage in a token bit of “ethical consumerism”? These contributions stand to corporate influence as a raindrop to an ocean. The ordinary person’s voice is the faintest whisper compared to Globocorp’s booming corporate megaphone. So when Globocorp weighs in on a sociopolitical issue, its input utterly dwarfs the average citizen’s.
This is not how democracy is supposed to work. In a democracy, items on the democratic agenda, such as those addressed by corporate activism, should be decided through an egalitarian process that gives each person an equal say—or, at the very least, a not utterly outgunned one.
This is already enough to establish premise 6 (that is, the claim that corporate activism undermines egalitarian decision-making) and, with it, claim 7 (that is, my argument’s ultimate conclusion, namely, that corporate activism is undemocratic). But in fact we have yet to consider the most damning evidence in the case of Democracy v. Corporate Activism.
We have seen that corporate activism—in the form of ideologically inflected advertising, messaging, donating, and employee training/proselytizing—renders inputs to the democratic process disproportionate. Now consider the ways in which activist corporations can simply override democratically chosen decisions. Globocorp, it turns out, does not just have a megaphone; it also has a veto button.
The scene is springtime in Indianapolis, 2015. Governor Mike Pence signs the “Religious Freedom and Restoration Act” (RFRA). The bill proves a national Rorschach test.
Supporters see a mainstream, reasonable law: mainstream, because modeled on existing state and federal statutes; reasonable, because it merely protects the free exercise of religion against government interference.
The law’s detractors see a different, darker image. To them, Indiana’s RFRA goes well beyond existing federal and state laws and is a thinly veiled attempt to “legitimize discrimination against gay people.”Footnote 33 Religiously conservative business owners, critics fear, could cite the RFRA as a reason not to serve gay customers.
Despite the controversy, the bill passes Indiana’s General Assembly by an overwhelming margin, 40–10. Pence signs, and conservatives rejoice.
A mere week later, Indiana lawmakers are again gathered before the press to discuss the RFRA. But this time they are not flanked, as before, by religious leaders and conservative activists. Instead, “a far different cast stood behind them, including a prominent gay businessman and corporate leaders from Eli Lilly, the Indiana Pacers and the Indiana Chamber of Commerce.”Footnote 34 The lawmakers (and their corporate handlers) have come not to celebrate the RFRA, but to revise it. The new language—“worked out during private negotiations between Republican leaders, key business and sports officials and the governor’s staff”—clarifies that the RFRA does not allow businesses to refuse service to gay customers.Footnote 35 Salesforce CEO Scott McCorkle declared the fix “a great first step.”Footnote 36 Some local religious leaders disagreed with the San Francisco-based CEO’s assessment, predicting that the changes would “destroy the law.”Footnote 37
What explains the sudden reversal? Why did Indiana legislators pass a bill 40–10 one week only to gut it the next? Was it political pressure? A grassroots uprising among ordinary Hoosiers against the RFRA?
Nothing of the sort. As Patrick Deneen explains, “it was not … political condemnation … that put Indiana’s RFRA in jeopardy, but … reputational and economic threats. Major corporations, including Apple, Salesforce, Eli Lilly, and Angie’s List, among others, threatened to diminish or withdraw their economic presence in the state.”Footnote 38 The reaction of Bill Oesterle, CEO of Angie’s List, is representative. “Angie’s List is open to all and discriminates against none,” Oesterle said. “We are hugely disappointed in what this bill represents.” The company, he noted, was cancelling a planned $40 million headquarters expansion in the state.Footnote 39
This episode is extremely instructive. It lays bare an indisputable truth about corporate power in our democracy, a truth well-put by Rebecca Henderson, herself an advocate of corporate activism: “Today’s firms have enormous power to influence governments if they choose to use it.”Footnote 40 Commenting specifically on the Indiana RFRA case, she writes: “In 2015, the governor of Indiana signed a bill into law that legitimized discrimination against gay people… . The response from the business community was swift and aggressive—and a week later the Indiana legislature backed down.”Footnote 41 Henderson’s evaluation of this “swift and aggressive,” patently undemocratic action is quite revealing. She wants more of it.
“Business,” Henderson writes, should learn from its success in Indiana, and “needs to take similarly focused action in support of our institutions and society” in other cases beyond the Hoosier state.Footnote 42 That is, corporations should make a habit of threatening disinvestment in response to disliked policy change. They should dangle the Damoclean sword of “capital flight” over the heads of backward states like Indiana, or North Carolina, or Georgia, promising to repay unprogressive policy in the coin of economic ruin.
“Nice economy you’ve got there,” Globocorp should, on Henderson’s view, say to the elected representatives of this or that benighted, backwater province. “Hate to see something happen to it. How about you don’t do that socially conservative thing that, for some unfathomable reason, the electorate wants you to do?”
It is possible that Globocorp knows better than Indiana or Georgia what justice requires. It is possible that Globocorp’s veto will lead to a substantively better outcome in this or that case. Corporate pressure helped end South African apartheid, for instance. So corporate activism, it must be admitted, can conceivably deliver morally correct results. But it cannot deliver them democratically. Government-by-corporate-diktat may be many things, but democratic isn’t one of them.
My argument mirrors a familiar—and, to my mind, persuasive—socialist critique of corporate power. That critique points out that, armed with the threat of “capital flight,” corporations enjoy a de facto veto over economic policy; by threatening to head for greener pastures, they can smother disliked economic policy in the cradle.Footnote 43 Democratic majorities, therefore, can enact economic policy only with Wall Steet’s blessing. That’s deeply undemocratic—or so many philosophers have argued.Footnote 44
The many left-wing philosophers who find this socialist critique of corporate power convincing should, I submit, find the present critique of corporate sociopolitical activism convincing as well. Activist corporations, I have suggested, enjoy a de facto veto not only over economic but also social policy. As a result, activist corporations’ social preferences set the boundaries of democratic possibility. Democratic majorities can enact social policy only with Wall Street’s blessing. That, surely, is deeply undemocratic.
In sum, collective decisions reached through a process shaped by Globocorp’s blaring megaphone and its omnipresent veto button may or may not be objectively correct. But either way, they will not respect the political equality of participants. They will not be democratic. Corporate activism, in short, undermines democracy—or so Stage III of my argument concludes.
Aren’t activist companies just responding to consumer demand?
In this section I consider and rebut an important objection to my account. To bring this objection into view, return to the observation with which I opened the essay: corporations have changed. Formerly averse to political controversy, now they court it. What explains this sea change in corporate behavior?
According to the “consumer demand” account, the explanation is simple. Corporate behavior has changed because customer expectations have changed. Before, consumers did not want corporations to address divisive sociopolitical issues; so, corporations exercised forbearance. Now, most consumers do want corporations to address such issues; so, corporations weigh in.Footnote 45
On this account, the best explanation of corporate activism is continuous with the best explanation of all corporate behavior: companies act so as to maximize profits. That used to mean keeping a low political profile. Now, given shifts in consumer demand, it means the opposite.
Why, then, does Starbucks fly the Pride flag? For the same reason it introduces a new latte: to make money—or so the consumer demand account has it.
Objection: If corporate activism mirrors public opinion, what’s undemocratic about it?
The consumer demand account is an empirical theory, not a normative one; it explains, rather than justifies, corporate activism. But perhaps it can be deployed as a premise in a normative defense of corporate activism. That defense might go like this:
The Defense: Corporate activism is actually quite democratic. After all, activist companies are just catering to consumer demand; they are just driving up business by saying what customers want to hear. Hence, corporate activism is ultimately controlled by, and responsive to, public opinion. Surely that helps burnish activism’s democratic chops. How undemocratic can corporate activism be, really, if companies take their activist marching orders from ordinary people? Indeed, isn’t there a sense in which corporate activism, on this picture, is positively good for democracy? It helps amplify ordinary people’s views on contested social and political issues.
The Defense turns on two key claims. The first is an empirical claim about corporate activism, namely, that corporations tailor their activism to fit existing consumer sentiment; they aim to mirror rather than shape public opinion. The second is normative. It asserts something like the following principle:
Mirroring contributes to democracy: There is something attractively democratic about a decision-making process if, within this process, the decisions of more influential participants robustly mirror the preferences of less influential ones.Footnote 46
Put it all together and the defense of corporate activism’s democratic bona fides goes like this:
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1. Mirroring contributes to democracy. There is something attractively democratic about a decision-making process if, within this process, the decisions of more influential participants robustly mirror the preferences of less influential ones.
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2. Consumer demand account: While corporations enjoy disproportionate influence in the societal process through which divisive sociopolitical issues are debated and resolved, they tailor their contributions to this process to consumer sentiment; their activist decisions robustly mirror consumer preferences.
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3. Therefore, thanks to corporate activism, there is something attractively democratic about sociopolitical decision-making.
Put differently, The Defense says that if corporate decisions robustly mirror consumer preferences (as stated in premise 2), and if such robust mirroring is a hallmark of democracy (as stated in premise 1), then corporate activism seems compatible with and even supportive of democracy. Such a result, notice, seemingly contradicts my main conclusion thus far, namely, that corporate activism is undemocratic.
Rebutting the objection
The Defense is interesting but ultimately unsuccessful. First, even if it is sound, The Defense does nothing to blunt my main objection, which is not that corporate activism fails to mirror public opinion, but that it undermines political equality by giving corporations disproportionate influence. The Defense does not challenge this point.
Second, The Defense is not sound, because its central empirical conjecture is false—indeed, obviously so. Corporate activism, premise 2 reassures us, simply reflects public opinion. However, corporate activism does not simply reflect public opinion. If it is a mirror, it is the curvy, distortive kind you would find in a fun house. Judging by corporate messaging, you would think the modal consumer’s politics were forged around a seminar table at Swarthmore or Yale. You would think consumers were overwhelmingly progressive. But, of course, that is not the case. Consumers are just people and people are not ideologically monolithic. Around 25 percent of Americans are progressive, 35 percent are conservative, and 36 percent describe themselves as moderate.Footnote 47
These simple truths bear emphasizing. Most readers of this essay, I imagine, are academics, and most academics occupy ideological echo chambers.Footnote 48 They are themselves overwhelmingly progressive, especially in the humanities and social sciences.Footnote 49 They are friends, in the main, with progressives. They associate, in the main, with progressives. They encounter, in the main, progressive ideas. And their social epistemic environment tends not only to screen out dissenting (that is, conservative) viewpoints, but also actively to undermine and discredit them.Footnote 50 Living in an ideological cloister, progressive academics may lose touch with America’s political diversity. They risk becoming blind to basic facts about public opinion―facts such as these:
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• Racial justice. Nearly 50 percent of Americans oppose BLMFootnote 51 and 40 percent deny that whites enjoy any advantages over Blacks.Footnote 52 One poll finds that 74 percent reject the idea that “when it comes to decisions about hiring and promotion,” companies and organizations should “take a person’s race and ethnicity into account.”Footnote 53 A different poll finds that only 33 percent approve of affirmative action.Footnote 54
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• LGBT issues. About 37 percent think gay marriage is a net bad for the country,Footnote 55 while 38 percent think society has gone too far in transgender acceptance.Footnote 56 Only 44 percent think that people should be able to choose their own gender identity.Footnote 57 About 58 percent would require transgender athletes to compete on teams that match their sex assigned at birth.Footnote 58
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• Feminism. About 45 percent of Americans describe feminism as “polarizing.”Footnote 59 Of those who have heard of #MeToo, a majority do not support the movement.Footnote 60 Nearly half of Democratic men under fifty years old—Democratic men, note—think that “[f]eminism has done more harm than good” and that “[g]ender ideology has corrupted American culture.”Footnote 61
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• Climate change. Only 37 percent say tackling climate change should be a “top” governmental priority.Footnote 62
In short, the United States is ideologically diverse. Academia may be monolithically left-wing, but public opinion is not. Tens if not hundreds of millions of Americans hold conservative positions on hot-button topics such as racial justice, LGBT issues, feminism, and climate change.
Per premise 2’s “corporate activism just reflects consumer sentiment” theory, there must be scores of companies scrambling to calibrate their activism for these millions upon millions of conservative customers. So where are they? One looks for such companies in vain. Strangely, they basically do not exist. Outside of a few economically marginal counterexamples—a My Pillow here, a Black Rifle Coffee there—activist corporations pin their colors exclusively to the progressive mast.
Even Bud Light beer—as populist a brand as you will find—has tested the waters of woke activism, forming a brand partnership with transgender influencer Dylan Mulvaney.Footnote 63 What’s next? Nickelodeon weaving queer theory into its cartoons? Actually, that already happened. Blue’s Clues, a Nickelodeon show designed for preschoolers, centered a segment around a drag queen “singing about a Pride parade including [an animated] beaver family with the trans member sporting mastectomy scars.”Footnote 64
In sum, the U.S. is an ideologically diverse country inundated with overwhelmingly progressive corporate messaging. Corporate activism does not mirror public opinion. It mirrors part of public opinion, the left-wing part, leaving the views of moderates and conservatives entirely out of the picture.
In other words, far from mirroring public opinion, corporate activism distorts it. But this means that—contrary to The Defense—there is something importantly undemocratic about corporate activism’s relationship to public opinion. Corporate activism has been unmasked as a process through which powerful deciders, far from faithfully channeling the views of “ordinary people” taken as a bloc, amplify an ideologically uniform subset of these views.
Multi-billion-dollar companies are manning the trenches for one side only in America’s fractious culture war. It is hard to see anything democratic about that.
Why are companies so woke?
Some readers may find it difficult to believe that corporate activism is as ideologically monolithic as I have described. After all, a company’s highest imperative is to make money. Alienating half the consumer base seems an odd way to do that. A priori, you would think that companies would emulate the studied neutrality of Michael Jordan, who explained his famously apolitical stance with a memorable quip: “Republicans buy sneakers, too.”Footnote 65
Jordan’s neutrality makes economic sense. Yet according to my account, corporations are not taking his advice. On the contrary, they have cast their lot entirely with team progressive. While I have provided lots of anecdotal evidence to support this claim, it would be good to supplement these empirics with a theoretical explanation for corporate activism’s leftward tilt. Accordingly, this section sketches an answer to the question: Why are companies so woke?
Consumer demand theory
Paul considers various accounts of “woke capital” in his excellent piece “The Puzzle of Woke Capital.” We have already encountered one such account: consumer demand theory, according to which Starbucks flies the Pride flag simply because that is what its customers want. While there must be some truth to this theory—it is hard to believe that corporate behavior is entirely disconnected from consumer sentiment—it cannot be the whole story. As Paul points out, “the consumer demand [theory] has no explanation for woke capital’s most interesting and puzzling marketing behavior, progressive social justice content directed toward a broad, decidedly non-woke audience.”Footnote 66
For example, Sports Illustrated now “regularly includes elderly, obese, and transgender models in its annual swimsuit edition.”Footnote 67 What explains this? Per the consumer demand theory, Sports Illustrated’s target demographic must be clamoring for more inclusive bikini shots. I leave it to the reader to evaluate the plausibility of that hypothesis.
Investor theory
If consumer demand doesn’t explain progressive corporate activism, what does? Picture a simple flowchart of the economic process. Investors provide capital to corporations, which produce widgets, bought by consumers. Corporations must cater to both of their flowchart neighbors. They need to satisfy consumer demand, even as they attract capital from investors.
What if those investors are themselves progressive? Progressive investors might demand progressive activism from corporations as part of the price of access to capital. This is the basic idea behind the “investor theory” of woke capital, which “argues that an alliance of activist asset managers, shareholders, and financial regulators are the prime movers” behind corporate America’s embrace of social justice ideology.Footnote 68
Key to this dynamic is the rise of Environmental, Social, and Governance (ESG) investing. ESG criteria purport to measure a company’s so-called “triple bottom line,” its impact on planet, people, and profit. Think of ESG as a kind of moral scorecard through which values-based investors decide where to direct their money.
In principle, ESG criteria could be ideologically moderate or even conservative in orientation. In practice, they skew progressive, a fact noted by Republican critics, such as Florida Governor Ron DeSantis, who recently signed legislation prohibiting the state’s pension funds from using ESG criteria. “ESG,” argues DeSantis, “is a way for the political left to achieve through corporate power what they cannot achieve at the ballot box.”Footnote 69
Despite Republican opposition, ESG investing remains massively influential. Top index funds such as BlackRock, State Street, and Vanguard—the Big Three institutional investors—are deeply committed to ESG metrics. Because they together constitute the largest shareholder in 88 percent of S&P 500 firms, their attitude toward ESG—and thus, to the progressive politics ESG encodes—is no small thing.Footnote 70 As Paul notes, “if BlackRock and its $10 trillion under management suggest corporations should lower carbon emissions, place more women on boards of directors, and expand transgender healthcare coverage, they do so.”Footnote 71
But how, specifically, do asset managers like BlackRock bring their influence to bear on portfolio companies? Malcom Salter identifies various ways. First, they can punish noncompliant companies by selling their shares, driving down share price. Second, they can submit shareholder proposals to shareholders’ meetings and vote proxies. Third, they can “screen companies for portfolio inclusion or exclusion according to ESG criteria.” Finally, they can “engage face-to-face with companies in closed-door discussions and negotiations” concerning ESG issues.Footnote 72
University theory
The investor theory does much to reduce the paradox of woke capital. Starbucks, on this account, flies the Pride flag not so much to appease customers, as to appease Larry Fink (BlackRock’s famously progressive CEO). But perhaps this account merely pushes the puzzle back a step. Companies, it says, are progressive to appease large investors; but why are large investors progressive?
To some extent this can be chalked up to contingency: Fink just happens to be fairly woke, and that’s that. But a deeper insight is available. Powerful decision-makers in the investment world are the product, in the main, of selective colleges and universities. The same is true of professional elites in the corporations themselves. But what are selective colleges and universities, these days, but incubators of social justice ideology? Perhaps the deepest explanation of woke capitalism, then, finds bedrock on the leafy quads of Berkeley, Brown, and Bowdoin.Footnote 73
To many observers of university life in the mid-2010s, it felt as if something deeply significant—and strange—was happening on campuses across the country. What could fairly be described as “struggle sessions” at Yale and Evergreen State College were only the most visible manifestation of a deeper shift in campus politics.Footnote 74 The shift was away from liberalism in the style of John Locke, John Stuart Mill, and Rawls—but toward what, exactly?Footnote 75
In broad outline, the new ideology emphasized the nonnegotiable importance—the sanctity, even—of diversity, multiculturalism, and equal outcomes across groups; furthermore, it attributed any disparities in outcomes favoring whites over nonwhites or men over women to oppression or discrimination.Footnote 76 Indeed, it tended to discover oppression, harm, and trauma everywhere—from the macro level (for example, systemic racism; the whole country was said to be “white supremacist”) to the very small (for example, “micro-aggressions,” as when someone says “I believe the most qualified person should get this job”Footnote 77).Footnote 78 About these claims, adherents of the new ideology seemed most unwilling to argue. The new ideology’s core tenets were, they indicated, beyond reasonable disagreement.Footnote 79
Around this time, it became fashionable among a certain set—call them the anti-anti-wokes—to downplay the significance of these developments. Indeed, was anything noteworthy even happening at all? And to the extent that it was, well—that’s just college kids pushing the boundaries a little bit, same as it ever was. Once they hit the working world, they will grow out of it. They will turn into garden-variety liberals, just like they always have: socially progressive, sure, but fundamentally open-minded and tolerant of dissenting perspectives—or so the anti-anti-wokes predicted.
Flash forward to 2023, and it seems quite clear that this prediction has failed. Yesterday’s campus illiberals berating the Dean for an emailed micro-aggression are today’s young professionals pressuring the CEO to take a stand against Dobbs v. Jackson Women’s Health Organization (2022).Footnote 80 As Paul notes, “highly educated Americans [have taken] the distinctive university culture from their student days into the professional-class workplace.”Footnote 81 Woke campuses beget woke students, who become woke professionals.Footnote 82 As Andrew Sullivan notes, “We all live on campus now.”Footnote 83
I began this section by floating a possible worry about my account. My case against corporate activism rests partly on the claim that it is ideologically monolithic, and therefore unreflective of the broad sweep of public opinion (which is ideologically plural). Whether this claim is true or false depends, of course, on the empirics. However, some readers may find the claim intrinsically implausible given the “Michael Jordan principle”: because Republicans buy sneakers, too, surely no rational corporation would declare openly and exclusively for one side of the partisan divide.
To combat this a priori skepticism, I aimed, in this section, to sketch a theory of woke capitalism. Such a theory answers the question: Why are companies so woke?
We have arrived at what I take to be a plausible answer. Call it the “university theory” of woke capitalism. Companies, in the final analysis, are woke because a critical mass of their major investors and employees, being cultural elites, are woke; and cultural elites are woke because their politics were formed in the very crucible of illiberal-cum-progressive values: the American university.
Conclusion
The argument reviewed
Let’s take stock. I pointed out that “corporations have changed.”Footnote 84 Previously allergic to political controversy, now they rush headlong into “corporate activism,” defined as “a firm’s public demonstration (statements and/or actions) of support for or opposition to one side of a partisan sociopolitical issue.”Footnote 85
I then argued that corporate activism is undemocratic because it is inegalitarian. When Globocorp weighs in on divisive sociopolitical topics, it addresses important issues of common concern that fall squarely on the democratic agenda. Per standard norms of democratic theory, such issues should be decided by the demos—not by Fortune 500 companies—through a process of deliberation and adjudication that gives each person a roughly “equal say.” Corporate activism undermines this process. Globocorp’s activist megaphone and veto button give it far more than an equal say. Corporate activism violates democratic norms by giving corporations disproportionate, inegalitarian influence over the processes through which our society tackles some of its most pressing and contentious issues—or so I argued.
Next, I considered an important objection to my argument. Dubbed The Defense, the objection asks the following question: How undemocratic is corporate activism, really, given that companies are just responding, in their activism, to consumer demand?
In reply, I made two moves. First, I noted that corporate activism remains inegalitarian—hence, undemocratic—even if it follows public opinion. Second, I pointed out that corporate activism does not simply follow public opinion. Instead, it is ideologically monolithic. It amplifies part of public opinion, the progressive part, while ignoring moderate and conservative perspectives (or even actively thwarting them, as in the Indiana RFRA case).
The Defense was meant to defend corporate activism. But in the end, it provided materials for further critiquing it. Working through The Defense’s flaws revealed just how undemocratic corporate activism really is. Not only is corporate activism inegalitarian; when it is ideologically monolithic, it also distorts democratic deliberation by amplifying one perspective to the exclusion of all others.
Actually existing corporate activism thus offends against democracy twice over. It denies ordinary people an equal say (call this the “inegalitarianism” defect), even as it drowns out all perspectives to the right of your average Mother Jones staffer (call this the “distortion” defect).
To put my main result more polemically: corporate activism, in 2023, is the profoundly inegalitarian, unrepresentative, and therefore undemocratic process through which cultural elites from Wall Street and Silicon Valley impose the social mores and political values of the Berkeley faculty club on a recalcitrant hinterland. (Does the language of “imposition” seem too strong? It would not to Indianans supportive of the RFRA.)
Implications
In closing, let me address the practical implications of my account. What, specifically, am I recommending that corporations do vis-à-vis activism?
My account suggests that corporations ought to refrain from taking positions on divisive sociopolitical issues, on pain of violating important democratic norms. They ought to exercise “forbearance,” to borrow a phrase from Saunders-Hastings.Footnote 86
However, this is an intermediate requirement, not an ultimate one. Democracy is not the only value, nor, among values, does it always take priority. On rare occasions it may be, all things considered, justified for corporations to engage in democracy-impugning activism in the service of something higher. So, faced with serious injustice and judging that its input could make a moral difference, Globocorp may dust off its activist megaphone. (What if its input wouldn’t matter? Then it should not speak. There is little sense in undermining democratic equality for no reason.)
Globocorp should be more reluctant still to wield its veto button. Subverting democratic outcomes—by, say, threatening to boycott a region in response to disliked policy—does more damage to democracy than merely disequalizing inputs, and so must meet a higher justificatory bar. Moreover, boycotts also impose harms on innocent third parties, such as all the employees and ordinary citizens harmed by the economic fallout.Footnote 87 In practical terms, this means Globocorp should not threaten to boycott a polity except in response to truly severe injustice.
One form that severe injustice can take is the denial of political liberties, including democratic ones. Suppose some U.S. state drastically scaled back voting rights, such that important democratic norms were violated. Corporate activism against such a policy might be unusually well justified because it might, on balance, promote rather than retard democratic values.Footnote 88 Arguably, the 2021 Major League Baseball (MLB) boycott of Georgia in response to the state’s new voting law, SB 202, fits this profile, although that may be a tendentious interpretation of the relevant facts. If, as President Joe Biden declared, the law amounted to “Jim Crow in the 21st century,” then MLB was probably justified in relocating its All-Star game away from Atlanta.Footnote 89 If, on the other hand, the law (as defenders claimed) merely tightened voting security while preserving a reasonable level of access to the ballot box, then it was MLB’s boycott—not SB 202—that undermined democracy.
Why not “Madisonian,” pluralistic corporate activism? The problem of overpoliticization
One final point: I have taken actually existing corporate activism to task for its ideologically monolithic nature. This raises an interesting possibility. What if corporate activism were ideologically pluralistic instead? What if, for every Pride-flag-flying Starbucks, there was a Black Rifle Coffee waving the Blue Lives Matter banner?
Such a system might aptly be described as “Madisonian Corporate Activism,” in deference to James Madison’s famous theory of “factions” in “Federalist No. 10.”Footnote 90 Madison sees politics mainly through the lens of interest-group struggle. Individuals, on his view, are not the prime actors in the democratic drama; powerful, organized groups—Madison’s “factions”—are. While policy-through-interest-group combat may seem undemocratic, Madison argues that it was not necessarily fated to be that way. Provided factions are sufficiently “diverse”—provided they represent the full range of public opinion, in all its plurality—then we can feel pretty confident that (in the words of a famous study of contemporary American politics) “the wants and needs of the average citizen tend to be reasonably well served by the outcomes of interest-group struggle.”Footnote 91
The defender of pluralistic corporate activism might find succor in Madison’s theory. The theory shows that politics by organized, powerful groups is not inherently unrepresentative. Globocorp can, on this model, use its megaphone with a clear conscience—so long as there is some equally influential megacorporation giving voice to other parts of the ideological spectrum.
While this is an interesting suggestion, Madisonian corporate activism suffers from two big moral flaws. (It is also extremely unrealistic because it would require roughly half of companies to abandon their leftist mores and tack hard to the right; this seems rather unlikely, given the progressive scruples of investors and professionals, as discussed in the previous section.) First, it abandons any pretense of egalitarianism; it does nothing to ensure that ordinary people have an “equal say” over important items on the democratic agenda.
Second, it does nothing to combat—and everything to inflame—the problem described by Talisse as “the political saturation of social space.” This is the pernicious overpoliticization of everyday life, the creeping incursion of partisan experiences, signifiers, and shibboleths into formerly apolitical spaces. In these politically saturated times, an increasing proportion of what we do seems freighted with political meaning. It is not just that conservatives and progressives listen to different music, wear different clothes, shop at different stores, and watch different programs; it is that “these [everyday] choices [have become] ways of publicly expressing [one’s] political commitments.”Footnote 92 By listening to country music, shopping at Whole Foods, watching the National Football League (NFL), or engaging in any number of ordinary, everyday actions, one picks sides in the culture war—whether one wants to or not. “Politics,” writes Talisse, “has become everything that we do.”Footnote 93
This constant and inescapable political signaling reinforces tribal identities, encouraging each side to define itself in opposition to the other not only politically but in virtually every aspect of life. Each side comes not merely to lose solidarity with the other, but actively to dislike the other.Footnote 94 As politics swallows everything, political foes turn into personal enemies. For example, in 2019, Pew found that 47 percent of Republicans would not date someone who pulled the lever for Hillary Clinton, while 71 percent of Democrats would not date a Donald Trump voter.Footnote 95
A bad state of affairs, this. I take political saturation to be deleterious to human flourishing as well as an obstacle to democracy: it is hard to deliberate with those you hate.
What does this have to do with corporate activism? As Talisse stresses, what we need to heal our partisan divides and preserve democratic functioning is less politics, not more. We need apolitical spaces, “venues for nonpolitical cooperative behavior” within which we can interact not as political opponents but simply as ordinary people, doing ordinary, nonpolitical things together. By working together in contexts where politics is simply irrelevant, we can come to see one another not as civic enemies, but as—perhaps—civic friends, reasonable people who can live alongside one another despite even deep political differences.Footnote 96
Corporate political activism torpedoes this healing strategy. The more Globocorp blares through its megaphone, the more politically saturated our social space becomes. Even a decade ago, one could not shop or work at a Patagonia or a Hobby Lobby without signaling partisan values; now, as more and more companies fly partisan colors, the space for politics-free, negative-partisanship-reducing economic cooperation has dwindled precipitously.
Notice that the Madisonian model of corporate activism—where all companies are political, just pluralistically so—would do nothing to reverse this unhappy trend. The root cause of affective polarization, on Talisse’s account, is the seeping of politics into everyday life. It’s seeing political signifiers when you’re just trying to get a cup of coffee. Changing the valence of those signifiers from left to right would not help.
In closing, then, pluralistic corporate activism is at best a minor improvement over the ideologically monolithic activism we’ve got. Real improvement will come from corporate forbearance, not Madisonian activism.Footnote 97 For democracy’s sake, Globocorp should largely retire its activist megaphone and veto button.
Acknowledgments
I would like to thank the other contributors to this volume, members of the Texas Christian University Political Science Distinction club, Grant Ferguson, David Schmidtz, and Robert Taylor for helpful feedback on an earlier version of this essay.
Competing interests
The author declares none.
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